Earnings Release • Jul 30, 2009
Earnings Release
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NYSE Euronext Announces Second Quarter 2009 Financial Results -- NYSE Liffe Clearing Termination Charge and Severance Generated GAAP Net Loss -- -- Pro Forma Diluted EPS of \$0.51 -- -- Pro Forma Fixed Operating Expenses Decline to \$398 Million --
NEW YORK – July 30, 2009 – NYSE Euronext (NYX) today reported a GAAP net loss of (\$182) million, or (\$0.70) per diluted share, for the second quarter of 2009, compared to net income of \$195 million, or \$0.73 per diluted share for the second quarter of 2008. Second quarter 2009 GAAP results include merger expenses and exit costs of (\$1.21) per diluted share, primarily related to severance and a one-time termination charge for NYSE Liffe Clearing. Second quarter 2008 GAAP results include a net (\$0.02) per diluted share negative impact from merger expenses and exit costs and the reversal of a litigation accrual. Pro forma non-GAAP diluted earnings per share excluding these items was \$0.51 in the second quarter of 2009, compared to \$0.75 in the second quarter of 2008.
"In the second quarter, we reported higher pro forma net revenue, operating income and diluted earnings per share compared to the first quarter of 2009 and continued to make significant progress with our new business initiatives that will diversify our business model and drive future growth," said Duncan L. Niederauer, CEO, NYSE Euronext. "While the severance and termination charges resulted in a GAAP loss for the quarter, the launch of NYSE Liffe Clearing in Europe earlier today is expected to generate revenues in excess of \$100 million annually and is anticipated to be accretive in 2009, and the staffing reductions we have made will result in significant future cost savings. Additionally, we announced a joint venture with DTCC to establish a new, innovative and capital efficient approach to clearing interest rate derivatives and we completed the roll-out of speed enhancements for NYSE, reducing latency to an average of five milliseconds. As we move through the second half of 2009, we will continue to invest in future growth, while at the same time reducing our fixed-cost base."
| (\$ in millions, except EPS) | 2Q09 | 1Q09 | 2Q08 |
|---|---|---|---|
| Gross Revenues | \$1,125 | \$1,112 | \$1,027 |
| Net Revenues | \$611 | \$604 | \$707 |
| Fixed Operating Expenses | (\$398) | (\$422) | (\$425) |
| Operating Income | \$214 | \$182 | \$282 |
| Net Income | \$132 | \$112 | \$199 |
| Diluted Earnings Per Share | \$0.51 | \$0.43 | \$0.75 |
The table below summarizes our pro forma non-GAAP results:
Michael S. Geltzeiler, Group Executive Vice President and Chief Financial Officer, NYSE Euronext, commented, "The positive impact from our ongoing technology and non-technology cost saving initiatives continued in the second quarter with fixed costs down 6% year-over-year. Excluding the impact of foreign exchange rates and investment in new businesses, our underlying fixed expenses were down \$50 million, or 12%, compared to the second quarter of 2008. We now believe that we will exceed our cost savings targets for the year."
Pro forma non-GAAP net income for the second quarter of 2009 was \$132 million, or \$0.51 per diluted share, compared to net income of \$199 million, or \$0.75 per diluted share, for the second quarter of 2008. Pro forma non-GAAP results for the second quarter of 2009 exclude (\$442) million pre-tax, or (\$1.21) per diluted share negative impact from merger expenses and exit costs, consisting of a \$355 million contract termination charge for NYSE Liffe Clearing, which commenced operations today, and \$87 million primarily related to the anticipated headcount reduction in Europe (approximately 230 employees) and a new voluntary resignation incentive program ("VRIP") in the U.S. (approximately 60 employees). Pro forma non-GAAP results for the second quarter of 2008 exclude a (\$38) million pre-tax negative impact from merger expenses and exit costs, primarily related to the U.S. VRIP initiated in the second quarter of 2008, as well as a \$36 million positive impact from the reversal of a litigation accrual. In addition to excluding merger expenses and exit costs and one-time items, pro forma non-GAAP results also exclude activity assessment and Section 31 fees, as well as favorable discrete tax items. A full reconciliation of these non-GAAP results is included in the attached tables.
U.S. Cash Equities
European Cash Equities
clients of 150-400 microseconds, as compared to 1.5 milliseconds before the UTP migration. The speed improvement for NYSE Arca Europe has been even more pronounced, with latency measured as low as 60 microseconds (roundtrip) with an average latency of 140 microseconds (roundtrip). In addition, NYSE Euronext is now offering Sponsored Access for all its European markets, making low latency, highly efficient trading available to non-members via brokers.
Exchange Traded Products and Global Indexes
European Derivatives
• For the second quarter of 2009, European derivatives products ADV was 4.9 million contracts, 10.2% above the 4.4 million contracts recorded in the second quarter of 2008. The 4.9 million in futures and options contracts ADV in the second quarter of 2009 consisted of 3.2 million contracts executed through our full-service LIFFE CONNECT trading platform and a total of 1.7 million contracts processed through Bclear, NYSE Liffe's trade administration and clearing service for OTC products. This compares to 3.3 million contracts executed through LIFFE CONNECT and 1.1 million contracts
processed through Bclear in the second quarter of 2008. Clearing fees related to Bclear are significantly lower than our other European derivatives products traded through our full-service offering, LIFFE CONNECT, and have fee caps. Year-to-date European derivatives products ADV of 4.3 million contracts was 3.6% below prior year levels.
U.S. Derivatives
Corporation ("FICC") to offer innovative risk management, clearing and settlement efficiencies for U.S. fixed income securities and derivatives. The initiative is expected to be operational in the second quarter of 2010, subject to definitive documentation and approvals.
• NYSE Liffe U.S. announced that it has signed a license agreement with MSCI Inc., a leading provider of investment decision support tools worldwide, to introduce a suite of domestic and international index futures products built on a range of MSCI Equity Indices. The new products, to be rolled-out in the third quarter of 2009, will initially be based on the MSCI US, EM and EAFE indices.
Global Listings
infrastructure with the agility of an open source platform at a fraction of the cost of onpremise proprietary trading systems.
Analyst/Investor/Media Call: July 30, 2009 at 8:00am (NY/EDT)/2:00pm (Paris/CEST) A presentation and live audio webcast of the second quarter 2009 earnings conference call will be available on the Investor Relations section of NYSE Euronext's website, http://www.nyseeuronext.com/ir. Those wishing to listen to the live conference via telephone should dial-in at least ten minutes before the call begins. An audio replay of the conference call will be available approximately one hour after the call on the Investor Relations section of NYSE Euronext's website, http://www.nyseeuronext.com/ir or by dial-in beginning approximately two hours following the conclusion of the live call.
Live Dial-in Information: United States: 866.700.0133 International: 617.213.8831 Passcode: 39687316
Replay Dial-in Information: United States: 888.286.8010 International: 617.801.6888 Passcode: 55674310
Note: NYSE Euronext net revenues (defined as total revenues less direct transaction costs comprised of Section 31 fees, liquidity payments, and routing and clearing fees) from its primary business activities are represented below as a percentage of total net revenues for the second quarter:
-- Derivatives trading accounts for 26%
-- Software and technology services accounts for 7%
-- Other accounts for 8%
To supplement NYSE Euronext's consolidated financial statements prepared in accordance with GAAP and to better reflect period-over-period comparisons, NYSE Euronext uses non-GAAP financial measures of performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure, calculated and presented in accordance with GAAP. Non-GAAP financial measures do not replace and are not superior to the presentation of GAAP financial results, but are provided to (i) present the effects of certain merger expenses and exit costs, other non-recurring items, and (ii) improve overall understanding of NYSE Euronext's current financial performance and its prospects for the future. Specifically, NYSE Euronext believes the non-GAAP financial results provide useful information to both management and investors regarding certain additional financial and business trends relating to financial condition and operating results. In addition, management uses these measures for reviewing financial results and evaluating financial performance. The non-GAAP adjustments for all periods presented are based upon information and assumptions available as of the date of this release.
NYSE Euronext (NYX) is a leading global operator of financial markets and provider of innovative trading technologies. The company's exchanges in Europe and the United States trade equities, futures, options, fixed-income and exchange-traded products. With more than 8,000 listed issues, NYSE Euronext's equities markets -- the New York Stock Exchange, Euronext, NYSE Arca and NYSE Amex -- represent nearly 40 percent of the world's equities trading, the most liquidity of any global exchange group. NYSE Euronext also operates NYSE Liffe, the leading European derivatives business and the world's second-largest derivatives business by value of trading. The company offers comprehensive commercial technology, connectivity and market data products and services through NYSE Technologies. NYSE Euronext is in the S&P 500 index, and is the only exchange operator in the S&P 100 index and Fortune 500. For more information, please visit: www.nyx.com
This press release may contain forward-looking statements, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning NYSE Euronext's plans, objectives, expectations and intentions and other statements that are not historical or current facts. Forward-looking statements are based on NYSE Euronext's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause NYSE Euronext's results to differ materially from current expectations include, but are not limited to: NYSE Euronext's ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk and U.S. and global competition, and other factors detailed in NYSE Euronext's reference document for 2008 ("document de référence") filed with the French Autorité des Marchés Financiers (Registered on April 28, 2009 under No. R. 09-031), 2008 Annual Report on Form 10-K and other periodic reports filed with the U.S. Securities and Exchange Commission or the French Autorité des Marchés Financiers. In addition, these statements are based on a number of assumptions that are subject to change. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by NYSE Euronext that the projections will prove to be correct. This press release speaks only as of this date. NYSE Euronext disclaims any duty to update the information herein.
| Three months ended June 30, | Six months ended June 30, | |||
|---|---|---|---|---|
| 2009 | 2008 | 2009 | 2008 | |
| Revenues | ||||
| Activity assessment | \$ 126 |
\$ 41 |
\$ 156 |
\$ 143 |
| Cash trading | 615 | 511 | 1,235 | 1,074 |
| Derivatives trading | 207 | 230 | 394 | 500 |
| Listing | 101 | 98 | 200 | 196 |
| Market data | 101 | 105 | 203 | 209 |
| Software and technology services | 44 | 34 | 88 | 59 |
| Regulatory | 8 | 14 | 22 | 27 |
| Other | 49 | 35 | 95 | 72 |
| Total revenues | 1,251 | 1,068 | 2,393 | 2,280 |
| Section 31 fees | (126) | (41) | (156) | (143) |
| Liquidity payments | (447) | (255) | (879) | (528) |
| Routing and clearing | (67) | (65) | (143) | (135) |
| Merger expenses and exit costs | (442) | (38) | (465) | (55) |
| Compensation | (158) | (139) | (326) | (313) |
| Systems and communications | (56) | (86) | (113) | (169) |
| Professional services | (43) | (31) | (98) | (61) |
| Depreciation and amortization | (66) | (59) | (134) | (116) |
| Occupancy | (38) | (28) | (74) | (59) |
| Marketing and other | (37) | (46) | (75) | (86) |
| Regulatory fine income | 1 | - | 1 | 2 |
| Operating (loss) income from continuing operations | (228) | 280 | (69) | 617 |
| Net interest and investment loss | (27) | (23) | (53) | (41) |
| Gain on sale of equity investment | - | 1 | - | 2 |
| Income from associates | - | 1 | - | 2 |
| Other income | 4 | 10 | 9 | 20 |
| (Loss) income from continuing operations before | ||||
| income tax provision | (251) | 269 | (113) | 600 |
| Income tax benefit (provision) | 72 | (74) | 40 | (172) |
| (Loss) income from continuing operations | (179) | 195 | (73) | 428 |
| Income from discontinued operations, net of tax | - | 1 | - | 2 |
| Net (loss) income | (179) | 196 | (73) | 430 |
| Net income attributable to noncontrolling interest | (3) | (1) | (5) | (4) |
| Net (loss) income attributable to NYSE Euronext | \$ (182) |
\$ 195 |
\$ (78) |
\$ 426 |
| Basic (loss) earnings per share from continuing operations | \$ (0.70) |
\$ 0.73 |
\$ (0.30) |
\$ 1.59 |
| Basic earnings per share from discontinued operations | - | - | - | 0.01 |
| Basic (loss) earnings attributable to NYSE Euronext per share | \$ (0.70) |
\$ 0.73 |
\$ (0.30) |
\$ 1.60 |
| Diluted (loss) earnings per share from continuing operations | (0.70) | \$ 0.73 |
\$ (0.30) |
\$ 1.59 |
| Diluted earnings per share from discontinued operations | - | - | - | 0.01 |
| Diluted (loss) earnings attributable to NYSE Euronext per share | \$ (0.70) |
\$ 0.73 |
\$ (0.30) |
\$ 1.60 |
| Basic weighted average shares outstanding | 260 | 266 | 260 | 266 |
| Diluted weighted average shares outstanding | 260 | 266 | 260 | 266 |
We use non-GAAP financial measures of operating performance. Non-GAAP measures do not replace and are not superior to the presentation of our GAAP financial results but are provided to improve overall understanding of our current financial performance and our prospects for the future. Please refer to the table entitled "Reconciliation of non-GAAP Financial Measures to GAAP Measures (unaudited)"
| Three months ended June 30, [a, b, c, d] | Six months ended June 30, [a, b, c, d] | |||||||
|---|---|---|---|---|---|---|---|---|
| 2009 | 2008 | 2009 | 2008 | |||||
| Pro Forma | Pro Forma | Pro Forma | Pro Forma | |||||
| Combined | Combined | Combined | Combined | |||||
| Revenues | ||||||||
| Cash trading | \$ 615 |
\$ | 511 | \$ | 1,235 | \$ | 1,074 | |
| Derivatives trading | 207 | 230 | 394 | 500 | ||||
| Listing | 101 | 98 | 200 | 196 | ||||
| Market data | 101 | 105 | 203 | 209 | ||||
| Software and technology services | 44 | 34 | 88 | 59 | ||||
| Regulatory | 8 | 14 | 22 | 27 | ||||
| Other | 49 | 35 | 95 | 72 | ||||
| Total revenues | 1,125 | 1,027 | 2,237 | 2,137 | ||||
| Liquidity payments | (447) | (255) | (879) | (528) | ||||
| Routing and clearing | (67) | (65) | (143) | (135) | ||||
| Compensation | (158) [f] | (175) [e] | (326) | (349) [e] | ||||
| Systems and communications | (56) | (86) | (113) | (169) | ||||
| Professional services | (43) | (31) | (98) | (61) | ||||
| Depreciation and amortization | (66) | (59) | (134) | (116) | ||||
| Occupancy | (38) | (28) | (74) | (59) | ||||
| Marketing and other | (37) | (46) | (75) | (86) | ||||
| Regulatory fine income | 1 | - | 1 | 2 | ||||
| Operating income | 214 | 282 | 396 | 636 | ||||
| Net interest and investment loss | (27) | (23) | (53) | (41) | ||||
| Income from associates | - | 1 | - | 2 | ||||
| Other income | 4 | 11 | 9 | 20 | ||||
| Income before income tax provision | 191 | 271 | 352 | 617 | ||||
| Income tax provision | (56) | [g] | (71) | (103) | [g] | (174) | ||
| Net income | 135 | 200 | 249 | 443 | ||||
| Net income attributable to noncontrolling interest | (3) | (1) | (5) | (4) | ||||
| Net income attributable to NYSE Euronext | \$ 132 |
\$ | 199 | \$ | 244 | \$ | 439 | |
| Basic earnings per share | \$ 0.51 |
\$ | 0.75 | \$ | 0.94 | \$ | 1.65 | |
| Diluted earnings per share | \$ 0.51 |
\$ | 0.75 | \$ | 0.94 | \$ | 1.65 | |
| Basic weighted average shares outstanding | 260 | 266 | 260 | 266 | ||||
| Diluted weighted average shares outstanding | 260 | 266 | 260 | 266 | ||||
| 0 |
The pro forma non-GAAP results of NYSE Euronext include the following adjustments to the GAAP results:
[a] The results of operations are presented as if the divestiture of the investment in GL Trade had been completed at the beginning of the earliest period presented.
We use non-GAAP financial measures of operating performance. Non-GAAP measures do not replace and are not superior to the presentation of our GAAP financial results but are provided to improve overall understanding of our current financial performance and our prospects for the future.
| Three months ended | Three months ended | |||||||
|---|---|---|---|---|---|---|---|---|
| June 30, 2009 [a, b, c, d] | June 30, 2008 [a, b, c, d] | |||||||
| US | European | Corporate | Pro Forma | US | European | Corporate | Pro Forma | |
| Operations | Operations | Items [e] | Combined | Operations | Operations | Items [e] | Combined | |
| Revenues | ||||||||
| Cash trading | \$ 528 |
\$ 85 |
\$ 2 |
\$ 615 |
\$ 356 |
\$ 155 |
\$ - |
\$ 511 |
| Derivatives trading | 46 | 161 | - | 207 | 31 | 199 | - | 230 |
| Listing | 91 | 10 | - | 101 | 90 | 8 | - | 98 |
| Market data | 54 | 47 | - | 101 | 50 | 55 | - | 105 |
| Other revenues | 61 | 49 | (9) | 101 | 69 | 14 | - | 83 |
| Total revenues (1) | 780 | 352 | (7) | 1,125 | 596 | 431 | - | 1,027 |
| Liquidity payments, routing and clearing (2) | (476) | (37) | (1) | (514) | (281) | (39) | - | (320) |
| Fixed operating expenses | (229) | (171) | 2 | (398) | (221) | (193) | (11) | (425) |
| Regulatory fine income | 1 | - | - | 1 | - | - | - | - |
| Operating income | \$ 76 |
\$ 144 |
\$ (6) |
\$ 214 |
\$ 94 |
\$ 199 |
\$ (11) |
\$ 282 |
| Net revenues= (1) + (2) | \$ 304 |
\$ 315 |
\$ (8) |
\$ 611 |
\$ 315 |
\$ 392 |
\$ - |
\$ 707 |
| Six months ended | Six months ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2009 [a, b, c, d] | June 30, 2008 [a, b, c, d] | |||||||||||||||
| US | European | Corporate | Pro Forma | US | European | Corporate | Pro Forma | |||||||||
| Operations | Operations | Items [e] | Combined | Operations | Operations | Items [e] | Combined | |||||||||
| Revenues | ||||||||||||||||
| Cash trading | \$ 1,048 |
\$ | 187 | \$ | - | \$ | 1,235 | \$ | 749 | \$ | 325 | \$ | - | \$ | 1,074 | |
| Derivatives trading | 90 | 304 | - | 394 | 69 | 431 | - | 500 | ||||||||
| Listing | 182 | 18 | - | 200 | 179 | 17 | - | 196 | ||||||||
| Market data | 111 | 92 | - | 203 | 104 | 105 | - | 209 | ||||||||
| Other revenues | 126 | 99 | (20) | 205 | 128 | 30 | - | 158 | ||||||||
| Total revenues (1) | 1,557 | 700 | (20) | 2,237 | 1,229 | 908 | - | 2,137 | ||||||||
| Liquidity payments, routing and clearing (2) | (955) | (68) | 1 | (1,022) | (577) | (86) | - | (663) | ||||||||
| Fixed operating expenses | (474) | (354) | 8 | (820) | (438) | (375) | (27) | (840) | ||||||||
| Regulatory fine income | 1 | - | - | 1 | 2 | - | - | 2 | ||||||||
| Operating income | \$ 129 |
\$ | 278 | \$ | (11) | \$ | 396 | \$ | 216 | \$ | 447 | \$ | (27) | \$ | 636 | |
| Net revenues= (1) + (2) | \$ 602 |
\$ | 632 | \$ | (19) | \$ | 1,215 | \$ | 652 | \$ | 822 | \$ | - | \$ | 1,474 |
The pro forma non-GAAP results of NYSE Euronext include the following adjustments to the GAAP results:
[a] The results of operations are presented as if the divestiture of the investment in GL Trade had been completed at the beginning of the earliest period presented.
[b] Merger expenses and exit costs of \$442 million and \$38 million have been eliminated from the results of operations for the three months ended June 30, 2009 and 2008, respectively, and \$465 million and \$55 million for the six months ended June 30, 2009 and 2008, respectively, as they represent nonrecurring charges.
[c] Activity assessment fees and Section 31 fees have been excluded from revenues and expenses, respectively, as they have no impact on operating income or net income.
[d] Gains on sale of equity investments of \$1 million and \$2 million have been eliminated from the results of operations for the three and six months ended June 30, 2008, respectively, as they represent non-recurring items.
[e] Corporate Items include intercompany eliminations of revenues and expenses between U.S. and Europe.
W e use non-GAAP financial measures of operating performance. N on-GAAP measures do not replace and are not superior to the presentation of our G AAP financial results but are provided to improve overall understanding of our current financial performance and our prospects for the future.
U.S. G AAP Results
U.S. G AAP Results
Pro Forma Adjustments
Pro Forma Adjustments Pro Forma Combined
Pro Forma Combined
| Three months ended June 30, 2009 | U.S. G AAP Results |
Pro Forma Combined |
|||||
|---|---|---|---|---|---|---|---|
| Revenues | \$ 1,251 |
\$ | (126) | [a] | \$ | 1,125 | |
| Operating expenses, net | (1,479) | 568 | [a], [b] | (911) | |||
| Operating income | (228) | 442 | 214 | ||||
| Net interest and investment loss | (27) | - | (27) | ||||
| Other income | 4 | - | 4 | ||||
| Income before income tax provision | (251) | 442 | 191 | ||||
| Income tax provision | 72 | (128) | [c] | (56) | |||
| Net income | (179) | 314 | 135 | ||||
| Noncontrolling interest | (3) | - | (3) | ||||
| Net income attributable to NY SE Euronext | \$ (182) |
\$ | 314 | \$ | 132 | ||
| U.S. G AAP | Pro Forma | Pro Forma | |||||
| Three months ended June 30, 2008 | Results | Combined | |||||
| Revenues | \$ 1,068 |
\$ (41) |
[a] | \$ 1,027 |
|---|---|---|---|---|
| Operating expenses, net | (788) | 43 | [a], [b] | (745) |
| Operating income | 280 | 2 | 282 | |
| Net interest and investment loss | (23) | - | (23) | |
| Gain on sale of businesses and equity investment | 1 | (1) | - | |
| Income from associates | 1 | - | 1 | |
| Other income | 10 | 1 | 11 | |
| Income before income tax provision | 269 | 2 | 271 | |
| Income tax provision | (74) | 3 | [c] | (71) |
| Income from discontinued operations, net of tax | 1 | (1) | [d] | - |
| Net income | 196 | 4 | 200 | |
| Noncontrolling interest | (1) | - | (1) | |
| Net income attributable to NY SE Euronext | \$ 195 |
\$ 4 |
\$ 199 |
|
Revenues \$ 2,393 \$ (156) [a] \$ 2,237 Operating expenses, net (2,462) 621 [a], [b] (1,841) Operating income (69) 465 396 Net interest and investment loss (53) - (53) Gain on sale of businesses and equity investment - - - Income from associates - - - Other income 9 - 9 Income before income tax provision (113) 465 352 Income tax provision 40 (143) [c] (103) Net income (73) 322 249 Noncontrolling interest (5) - (5) Net income attributable to NY SE Euronext \$ (78) \$ 322 \$ 244
| Revenues | \$ 2,280 |
\$ (143) |
[a] | \$ 2,137 |
|---|---|---|---|---|
| Operating expenses, net | (1,663) | 162 | [a], [b] | (1,501) |
| Operating income | 617 | 19 | 636 | |
| Net interest and investment loss | (41) | - | (41) | |
| Gain on sale of businesses and equity investment | 2 | (2) | - | |
| Income from associates | 2 | - | 2 | |
| Other income | 20 | - | 20 | |
| Income before income tax provision | 600 | 17 | 617 | |
| Income tax provision | (172) | (2) | [c] | (174) |
| Income from discontinued operations, net of tax | 2 | (2) | [d] | - |
| Net income | 430 | 13 | 443 | |
| Noncontrolling interest | (4) | - | (4) | |
| Net income attributable to NY SE Euronext | \$ 426 |
\$ 13 |
\$ 439 |
[a] Includes Activity assessment fees.
| [b] Includes the following adjustments: | |||||
|---|---|---|---|---|---|
| Three months ended | Six months ended | ||||
| June 30, 2009 | June 30, 2008 | June 30, 2009 | June 30, 2008 | ||
| Section 31 fees | \$ 126 |
\$ | 41 | \$ 156 |
\$ 143 |
| M erger expenses and exit costs | 442 | 38 | 465 | 55 | |
| Compensation | - | (36) * | - | (36) | |
| \$ 568 |
\$ | 43 | \$ 621 |
\$ 162 |
* To eliminate the reversal of an accrual relating to certain litigation.
[c] Includes the tax effect of pro forma adjustments and normalization of effective tax rate to disregard certain favorable discrete items, primarily tax credits, as they represent non-recurring items.
[d] Includes the adjustment to present results of operations as if the divestiture of G L Trade had been completed at the beginning of the earliest period presented.
| NYSE Euronext |
|---|
| Operating expenses including non-GAAP financial measures (unaudited) |
| (in millions) |
our GAAP financial results but are provided to improve overall understanding of our current financial performance and our prospects for the future. We use non-GAAP financial measures of operating performance. Non-GAAP measures do not replace and are not superior to the presentation of
| Operating expenses for the three months ended June 30, 2009 on a GAAP basis less: Section 31 fees Liquidity payments Routing and clearing Merger expenses and exit costs |
\$ 1,480 (126) (447) (67) (442) |
|
|---|---|---|
| Fixed operating expenses for the three months ended June 30, 2009 | 398 | |
| Excluding the impact of: Currency translation Acquisitions and dispositions, net New business initiatives Duplicative datacenter and integration |
29 (35) (12) * (5) |
|
| Fixed operating expenses for the three months ended June 30, 2009 on a pro forma non-GAAP basis | \$ 375 |
[a] |
| Operating expenses for the three months ended June 30, 2008 on a GAAP basis less: Section 31 fees Liquidity payments Routing and clearing Merger expenses and exit costs Compensation |
\$ 788 (41) (255) (65) (38) 36 |
|
| Fixed operating expenses for the three months ended June 30, 2008 | \$ 425 |
[b] |
| Variance (\$) Variance (%) |
\$ (50) -12% |
[a] - [b] = [c] [c] / [b] |
| Operating expenses for the six months ended June 30, 2009 on a GAAP basis less: Section 31 fees Liquidity payments Routing and clearing |
\$ 2,463 (156) (879) (143) |
|
| Merger expenses and exit costs Fixed operating expenses for the six months ended June 30, 2009 |
(465) 820 |
|
| Excluding the impact of: Currency translation Acquisitions and dispositions, net New business initiatives Duplicative datacenter and integration |
64 (88) (32) * (13) |
|
| Fixed operating expenses for the six months ended June 30, 2009 on a pro forma non-GAAP basis | \$ 751 |
[d] |
| Operating expenses for the six months ended June 30, 2008 on a GAAP basis less: Section 31 fees Liquidity payments Routing and clearing Merger expenses and exit costs Compensation |
\$ 1,665 (143) (528) (135) (55) 36 |
|
| Fixed operating expenses for the six months ended June 30, 2008 | \$ 840 |
[e] |
| Variance (\$) Variance (%) |
\$ (89) -11% |
[d] - [e] = [f] [f] / [e] |
* Includes the contribution of Amex, Wombat and AEMS.
** Includes the contribution of new business initiatives, primarily SFTI Europe, SmartPool and NYSE Liffe U.S.
| June 30, |
December | ||
|---|---|---|---|
| 2009 | 31, | 2008 | |
| Assets | |||
| Current assets: |
|||
| Cash, cash equivalents, investment and other securities |
\$ 635 |
\$ | 1,013 |
| Accounts receivable, net |
661 | 744 | |
| Deferred income taxes |
90 | 113 | |
| Other current assets |
234 | 156 | |
| Total current assets |
1,620 | 2,026 | |
| Property and equipment, net |
811 | 695 | |
| Goodwill | 4,178 | 3,985 | |
| Other intangible assets, net |
6,153 | 5,866 | |
| Deferred income taxes |
629 | 671 | |
| Investment in associates and other assets |
897 | 705 | |
| Total assets |
\$ 14,288 |
\$ | 13,948 |
| Liabilities and equity |
|||
| Accounts payable and accrued expenses |
\$ 1,523 |
\$ | 1,330 |
| Deferred revenue |
308 | 113 | |
| Short term debt |
410 | 1,101 | |
| Deferred income taxes |
25 | 38 | |
| Total current liabilities |
2,266 | 2,582 | |
| Accrued employee benefits |
540 | 576 | |
| Deferred revenue |
352 | 360 | |
| Long term debt |
2,137 | 1,787 | |
| Deferred income taxes |
2,064 | 2,002 | |
| Other liabilities |
177 | 67 | |
| Total liabilities |
7,536 | 7,374 | |
| Equity | 6,752 | 6,574 | |
| Total liabilities and equity |
\$ 14,288 |
\$ | 13,948 |
| Average Daily Volume Total Volume |
Total Volume | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Unaudited) | Q2 '09 | Q2 '08 | % Chg | Q2 '09 | Q2 '08 | % Chg | YTD 2009 | YTD 2008 | % Chg | |
| Number of Trading Days - European Markets Number of Trading Days - U.S. Markets |
62 63 |
64 64 |
- | 62 63 |
64 64 |
- | 125 124 |
126 125 |
- - |
|
| European Cash Products (trades in thousands) | 1,455 | 1,371 | 6.1% | 90,184 | 87,772 | 2.7% | 176,812 | 190,815 | -7.3% | |
| Equities Exchange-Traded Funds Structured Products Bonds |
1,395 15 39 6 |
1,325 6 35 5 |
5.3% 130.6% 12.3% 7.9% |
86,504 912 2,409 359 |
84,807 408 2,213 344 |
2.0% 123.4% 8.8% 4.5% |
169,003 1,783 5,324 702 |
184,104 970 5,038 702 |
-8.2% 83.8% 5.7% 0.0% |
|
| U.S. Cash Products (shares in millions) | 3,642 | 2,916 | 24.9% | 229,432 | 186,600 | 23.0% | 474,991 | 401,033 | 18.4% | |
| 1 NYSE Listed Issues |
||||||||||
| 2 NYSE Group Handled Volume 3 NYSE Group Matched Volume Total NYSE Listed Consolidated Volume |
2,634 2,394 6,086 |
2,173 1,949 4,169 |
21.2% 22.8% 46.0% |
165,966 150,847 383,397 |
139,052 124,762 266,804 |
19.4% 20.9% 43.7% |
344,346 312,247 772,291 |
299,138 270,044 545,144 |
15.1% 15.6% 41.7% |
|
| NYSE Group Share of Total NYSE Listed Consolidated Volume 2 Handled Volume 3 Matched Volume |
43.3% 39.3% |
52.1% 46.8% |
-8.8% -7.5% |
43.3% 39.3% |
52.1% 46.8% |
-8.8% -7.5% |
44.6% 40.4% |
54.9% 49.5% |
-10.3% -9.1% |
|
| NYSE Arca & Amex Listed Issues | ||||||||||
| 2 NYSE Group Handled Volume 3 NYSE Group Matched Volume Total NYSE Arca & Amex Listed Consolidated Volume NYSE Group Share of Total NYSE Arca & NYSE Amex Listed Consolidated Volume 2 Handled Volume 3 Matched Volume |
608 531 2,253 27.0% |
316 272 988 32.0% |
92.4% 95.3% 128.1% -5.0% |
38,298 33,456 141,909 27.0% |
20,222 17,403 63,209 32.0% |
89.4% 92.2% 124.5% -5.0% |
80,042 70,246 286,062 28.0% |
45,339 39,172 134,735 33.7% |
76.5% 79.3% 112.3% -5.7% |
|
| Nasdaq Listed Issues | 23.6% | 27.5% | -3.9% | 23.6% | 27.5% | -3.9% | 24.6% | 29.1% | -4.5% | |
| 2 NYSE Group Handled Volume 3 NYSE Group Matched Volume Total Nasdaq Listed Consolidated Volume |
400 328 2,409 |
427 356 2,099 |
-6.4% -8.1% 14.8% |
25,169 20,633 151,790 |
27,326 22,804 134,315 |
-7.9% -9.5% 13.0% |
50,602 41,686 288,024 |
56,555 47,026 283,534 |
-10.5% -11.4% 1.6% |
|
| NYSE Group Share of Total Nasdaq Listed Consolidated Volume 2 Handled Volume 3 Matched Volume |
16.6% 13.6% |
20.3% 17.0% |
-3.7% -3.4% |
16.6% 13.6% |
20.3% 17.0% |
-3.7% -3.4% |
17.6% 14.5% |
19.9% 16.6% |
-2.4% -2.1% |
|
| 1,4 Exchange-Traded Funds |
||||||||||
| 2 NYSE Group Handled Volume 3 NYSE Group Matched Volume Total ETF Consolidated Volume |
598 523 2,278 |
334 290 1,020 |
79.2% 80.5% 123.4% |
37,655 32,978 143,542 |
21,346 18,561 65,272 |
76.4% 77.7% 119.9% |
79,811 70,168 292,412 |
48,287 42,053 141,406 |
65.3% 66.9% 106.8% |
|
| NYSE Group Share of Total ETF Consolidated Volume 2 Handled Volume 3 Matched Volume |
26.2% 23.0% |
32.7% 28.4% |
-6.5% -5.4% |
26.2% 23.0% |
32.7% 28.4% |
-6.5% -5.4% |
27.3% 24.0% |
34.1% 29.7% |
-6.9% -5.7% |
Please refer to footnotes on the following page.
| Average Daily Volume | Total Volume | Total Volume | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (Unaudited; contracts in thousands) | Q2 '09 | Q2 '08 | % Chg | Q2 '09 | Q2 '08 | % Chg | YTD 2009 | YTD 2008 | % Chg |
| Number of Trading Days - European Markets Number of Trading Days - U.S. Markets |
62 63 |
64 64 |
- | 62 63 |
64 64 |
- | 125 124 |
126 125 |
- |
| European Derivatives Products | 4,883 | 4,430 | 10.2% | 302,754 | 283,513 | 6.8% | 540,844 | 565,757 | -4.4% |
| 5 Total Interest Rate Products |
2,162 | 2,275 | -5.0% | 134,063 | 145,630 | -7.9% | 259,247 | 317,016 | -18.2% |
| Short Term Interest Rate Products Medium and Long Term Interest Rate Products |
2,064 99 |
2,178 97 |
-5.3% 1.3% |
127,949 6,114 |
139,399 6,231 |
-8.2% -1.9% |
246,800 12,447 |
303,506 13,510 |
-18.7% -7.9% |
| 6 Total Equity Products |
2,672 | 2,108 | 26.7% | 165,649 | 134,921 | 22.8% | 275,691 | 241,604 | 14.1% |
| Total Individual Equity Products Total Equity Index Products |
2,060 612 |
1,540 568 |
33.8% 7.7% |
127,714 37,935 |
98,550 36,371 |
29.6% 4.3% |
196,159 79,532 |
160,774 80,830 |
22.0% -1.6% |
| Bclear Individual Equity Products Equity Index Products |
1,681 1,556 125 |
1,098 999 99 |
53.1% 55.8% 25.7% |
104,197 96,474 7,724 |
70,259 63,917 6,342 |
48.3% 50.9% 21.8% |
148,239 131,234 17,005 |
103,194 90,639 12,555 |
43.7% 44.8% 35.4% |
| Commodity Products | 49 | 46 | 6.0% | 3,042 | 2,963 | 2.7% | 5,905 | 7,137 | -17.3% |
| 7 U.S. Derivatives Products - Equity Options |
|||||||||
| NYSE Group Options Contracts Total Consolidated Options Contracts |
2,590 14,229 |
1,512 12,301 |
71.3% 15.7% |
163,192 896,411 |
96,783 787,288 |
68.6% 13.9% |
302,309 1,697,023 |
215,457 1,600,310 |
40.3% 6.0% |
| NYSE Group Share of Total NYSE Liffe U.S. |
18.2% | 12.3% | 18.2% | 12.3% | 17.8% | 13.5% | 4.3% | ||
| Precious Metals Futures Volume | 13.9 | - | 875.7 | - | 2,158.1 | - | - |
1 Includes all volume executed in NYSE Group crossing sessions.
2 Represents the total number of shares of equity securities and ETFs internally matched on the NYSE Group's exchanges or routed to and executed at an external market center. NYSE Arca routing includes odd-lots.
3 Represents the total number of shares of equity securities and ETFs executed on the NYSE Group's exchanges.
4 Data included in previously identified categories.
5 Includes currency products.
6 Includes Bclear trading Includes all trading activities for Bclear, NYSE Liffe's clearing service for wholesale derivatives.
7 Includes trading in U.S. equity options contracts, not equity-index options.
Source: NYSE Euronext, Options Clearing Corporation and Consolidated Tape as reported for equity securities.
All trading activity is single-counted, except European cash trading which is double counted to include both buys and sells.
US data has been updated for Amex integration for October 2008 forward.
| (U naudited) | Three M onths Ended | ||
|---|---|---|---|
| June 30, 2009 |
M arch 31, 2009 |
June 30, 2008 |
|
| N YSE Euronext Listed Issuers | |||
| N YSE Listed Issuers | |||
| 1 Issuers listed on U .S. M arkets 1 N um ber of new issuer listings 2 C apital raised in connection with new listings (\$m illions) |
2,988 74 \$1,445 |
3,108 50 \$733 |
2,517 94 \$4,311 |
| Euronext Listed Issuers | |||
| 1 Issuers listed on Euronext 3 N um ber of new issuer listings 2 C apital raised in connection with new listings (\$m illions) |
1,046 6 \$1 |
1,055 4 \$0 |
1,133 20 \$2,540 |
| N YSE Euronext M arket Data | |||
| 4 N YSE M arket Data |
|||
| Share of Tape A revenues (% ) Share of Tape B revenues (% ) Share of Tape C revenues (% ) Professional subscribers (Tape A) |
47.5% 33.8% 19.6% 403,588 |
48.0% 34.2% 21.0% 424,589 |
51.6% 32.4% 20.2% 454,536 |
| Euronext M arket Data | |||
| N um ber of term inals | 250,689 | 264,853 | 220,898 |
| N YSE Euronext Operating Expenses | |||
| 5 N YSE Euronext em ployee headcount |
|||
| N YSE Euronext headcount excluding G L Trade G L Trade headcount |
3,538 n.a. |
3,709 n.a. |
3,892 1,451 |
| N YSE Euronext Financial Statistics | |||
| N YSE Euronext foreign exchange rate | |||
| Average €/U S\$ exchange rate Average £/U S\$ exchange rate |
\$1.364 \$1.551 |
\$1.306 \$1.437 |
\$1.563 \$1.972 |
1 Figures for NYSE listed issuers include listed operating com panies, SPACs, closed-end funds, and ETFs, and do not include NYSE Arca, Inc. or structured products listed on the NYSE. There were 1,022 ETFs and 6 operating com panies exclusively listed on NYSE Arca, Inc. as of June 30, 2009. There were 483 structured products listed on the NYSE as of June 30, 2009.
Figures for new issuer listings include NYSE new listings and new ETP listings only (NYSE A m ex and N YSE Arca are excluded). Figures for Euronext present the operating com panies were listed on Euronext and do not include NYSE Alternext, Free M arket, closed funds, ETFs and structured product (warrants and certificates). As of June 30, 2009, 123 com panies were listed on NYSE Alternext, 307 on Free M arket and 464 ETFs were listed on NextTrack.
2 Euronext figures show capital raised in m illions of dollars by operating com panies listed on Euronext, N YSE Alternext and Free M arket and do not include close-end funds, ETFs and structured products (warrants and certificates). NYSE figures show capital raised in m illions of dollars by operating com panies listed on NYSE and NYSE Arca and do not include closed-end funds, ETFs and structured products.
3 Euronext figures include operating com panies listed on Euronext, NYSE Alternext and Free M arket and do not include closed-end funds, ETFs and structured products (warrants and certificates).
4 "Tape A" represents NYSE listed securities, "Tape B" represents NYSE Arca and NYSE A m ex listed securities, and "Tape C" represents Nasdaq listed securities. Per R egulation NM S, as of April 1, 2007, share of revenues is derived through a form ula based on 25% share of trading, 25% share of value traded, and 50% share of quoting, as reported to the consolidated tape. Prior to April 1, 2007, share of revenues for Tape A and B was derived based on share of trades reported to the consolidated tape, and share of revenue for Tape C was derived based on an average of share of trades and share of volum e reported to the consolidated tape. The consolidated tape refers to the collection and dissem ination of m arket data that m ultiple m arkets m ake available on a consolidated basis. Share figures exclude transactions reported to the FINRA/NYSE Trade Reporting Facility.
5 NYSE Euronext sold its 40% stake in GL Trade in October 2008. N YSE Euronext headcount includes both the em ployees of NYXT and NYSE Am ex for all periods presented.
Source: NYSE Euronext, Options Clearing Corporation and Consolidated Tape as reported for equity securities.
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